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Caixa Geral capital injection starts with €1.445bn share increase

The Portuguese state on Wednesday concluded the first phase of the injection of fresh capital into state bank Caixa Geral de Depósitos (CGD), in the form of a €1.445-billion increase in its share capital, subscribed by the state, the Ministry of Finance said in a statement.

It noted that this implements part of the 'General Agreement' signed on 23 August of last year by the European Commission and the Portuguese state, aimed at bolstering CGD's finances "under market conditions, without this representing state aid."

The capital increase came in the form of the conversion of €945 million in contingent capital instruments (CoCos) and respective interest subscribed to by the state in 2012, and €500 million to buy shares from the Parcaixa holding company.

The operation was agreed with European Union officials in the summer and presented by the Socialist government as a victory in avoiding accusations of illegal state aid.

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